The Structure Of International Business

4 June, 2009

It’s no secret that many of today’s major corporations have office, manufacturing plants, and supplies in countries all around the world. The car you drive may have been made in one country and sold to you in another and the same applies to many of the standard household items you use every day.

In order to be an effective manager its important for you to understand the dynamic of the international workplace. A company may call itself “international” but that could mean one of many things. Let’s take a look at the differences between them.

First we have domestic businesses. Domestic businesses are generally located in one country only and obtain all of their resources from that same country. Examples of domestic businesses are banks, mortgage companies, and small retail chains.

International companies are becoming larger in number and represent organisations that have their main offices in one country but at the same time finds its resources or makes a large percentage of its sales in another country (or in several others).This company will earn most of its revenue from its main country or origin but will earn a significant percentage (even if only 10%) from selling in other countries.

Multinational companies, also known as MNCs or multinational corporations, have a much wider global reach. The company’s home offices may be based in one country but the organisation will have several other administrative and manufacturing offices located in several countries around the world. Many of today’s modern car companies have locations in several countries, making it easier for them to make and sell their cars to a global market while making sure they’re tailored to the needs of each demographic location.

Last, but certainly not least, are global businesses.Global businesses tend to operate in several countries but never really claim one as being “home.” Some companies, like energy companies, may find it possible to operate without claiming one country or another as home but in reality it is very difficult to operate in this manner.

So what type of company do you work for? I’d venture to guess you work for one of the first three- most likely one of the first two. Do you think there are advantages or disadvantages to companies attempting to spread their wings internationally?

Looking for more tips on succeeding in an international company? Try this article: